Russia-Ukraine crisis: The ramifications on Europe and MENA

The world has eyes riveted on the border between Ukraine and Russia. The scenario of a Russian invasion is taken very seriously by Western Capitals. Its impacts on regional equilibrium would be very challenging.

Russia Ukraine crisis
If Russia were to launch any offensive against Ukraine, its ripples will be felt not only in Europe but also as far away as in the Middle East and North Africa, where its effects are likely to be particularly profound. ©Creative Commons CC0

Midst ongoing diplomatic efforts to avert what the United States and its allies say is a potential invasion of Ukraine by Russia, let us take a look at the background of the conflict and peek into what could happen in case of a war, the role played by LNG, and its impact on the energy market and on the Middle East and North Africa.

Roots of the conflict

Several regions of Ukraine (Crimea, Donbass…) are considered by foreign medias as Russian-speaking because of Stalin policy of settlement by non-native people in the 1930s, 1940s and 1950s. This policy had significantly changed demographic equilibrium in many former Soviet republics. For example, Crimea was not populated by Russians originally, but by Tatars. What we witness nowadays is Ukraine paying the high price of this disastrous policy.

Ukraine was part of the Soviet Union until its collapse in 1991. Since then Russia has sought to keep its neighbors in its circle of influence. In April 2014, a conflict erupted in Ukraine’s eastern industrial heartland, known as the Donbas, with armed separatists seizing government buildings and proclaiming a “people’s republics” in the Donetsk and the Luhansk regions. Following this the Ukrainian military and volunteer battalions were mobilized to put down the unrest.

According to allegations levelled by Ukraine and the West, Russia had sent weapons and troops to support the separatists, claims which have been denied by Moscow; it has rather said, Russians fighting alongside the separatists went on their own.

Midst these claims and counterclaims, a Malaysia Airlines passenger jet traveling from Amsterdam to Kuala Lumpur on July 17, 2014, was shot down over eastern Ukraine, killing all 298 passengers on board. Dutch prosecutors have alleged that it was shot by a Russian Buk missile from an area controlled by the rebels. Moscow has denied its involvement in the downing of the Malaysia Airlines passenger jet.

Creation of the Crimean Crisis

In November 2013, the then Ukraine’s pro-Russian president Viktor Yanukovych, had rejected closer ties with the European Union and refused to sign an association agreement on the eve of a summit in Vilnius, Lithuania.

Russia had then offered Ukraine economic assistance to the tune of $15 billion, accusing Brussels and the International Monetary Fund of being inflexible in their plan to bail out Ukraine’s faltering economy.

Yanukovych’s rejection of closer ties to the EU saw many citizens going on a rampage on the streets of Kyiv, with the unrest escalating over several months following which security forces attempted to clamp down on the protestors in which dozens lost their lives.

The violence unleashed by protestors was such that it led Yanukovych to flee the capital, which had fallen into the hands of various pro-European opposition parties. The focus then turned to Crimea, a peninsula in the south of the country, home to an ethnic Russian majority, and the headquarters of the Russian Black Sea Fleet.

Russian President Vladimir Putin had then sent the Russian army for an unexpected military exercise and on February 27, gunmen with no insignia on their uniforms seized Crimean government buildings as well as two of its airports on February 28.

Although Putin had initially denied that the involvement of unbadged Russian troops in Crimea, a month later Putin admitted that he had “of course” deployed troops to Crimea. These troops were known as Putin’s “little green men”.

In March, Crimea voted overwhelmingly in favour of leaving Ukraine in a referendum that the United States and Europe said was illegal and imposed sanctions on Russia. Defying Western leaders, on March 21, Putin signed a legislation which completed the process of Crimea’s absorption into Russia. Britain’s then foreign minister William Hague, termed the Russian actions as “the biggest crisis in Europe in the 21st century.”

Crimea’s annexation by Russia was genuinely popular in Russia as reflected in Putin’s rating soaring, despite the Russia’s economic crisis and the crash of the rouble.

With the United States and the European Union imposing sanctions on Russia for its annexation of Crimea, which effectively blocked Moscow’s access to global capital markets, Russia retaliated by banning most Western food imports and vowed that Western sanctions will never force it to change its course on Ukraine.

Following a series of military defeats by Ukraine, Germany and France helped broker a peace deal in February 2015 in the Belarusian capital of Minsk.

The agreement, a diplomatic coup for Russia, saw Ukraine granting broad autonomy to rebel held regions and declare an amnesty for the rebels. It also stipulated that Ukraine would regain full control of its border with Russia in the rebel-held territories only after they elect local leaders and legislatures.

Many Ukrainians saw the deal as a betrayal of national interests and opposed it.

While the Minsk agreement largely helped bring an end to hostilities, sporadic skirmishes continued; efforts at a political settlement have stalled.

Ukrainian officials have repeatedly pushed for revising the Minsk Agreement which has been rejected by Russia.

While separatists have demanded Russia to incorporate the territories held by them, Moscow has largely ignored the demand, perhaps hoping that these eastern regions would eventually help draw Ukraine back into Russia’s orbit and thwart Kyiv’s aspirations to join NATO and the EU.

Russia has granted citizenship to more than 600,000 people in the rebel-controlled regions.

In 2019, Volodymyr Zelensky, was elected president of Ukraine by a landslide vote on the back of promises to end the fighting and root out the country’s endemic corruption.

He successfully pushed for a series of prisoner exchanges and sought to secure a lasting truce by pulling back troops and heavy weapons from the line of contact.

In December 2019, the leaders of Russia, Ukraine, France and Germany met in Paris, reaffirming their commitment to the 2015 peace deal.

Escalation of tensions

The lack of a lasting political resolution to the conflict has given rise to new tensions, with Ukrainian authorities saying ceasefire violations have become more frequent in recent weeks, with nearly 30 troops killed in 2022.

Another reason for the increase in tensions could be statements from the Ukrainian government saying it will apply for membership with the European Union in 2024 and its ambition to join NATO.

Ukrainian authorities have also accused Russia of fueling tensions by deploying 41,000 troops near the border with eastern Ukraine and 42,000 in Crimea, where Moscow has a large naval base.

According to Russian Defense Minister Sergei Shoigu, the buildup in troop levels was part of readiness drills in response to what he described as being threats from NATO.

Russia stationing more than 100,000 troops near its border with Ukraine citing military exercises, has once again fueled tensions with Ukraine and the West worried about the concentration of Russian troops, urging Moscow to pull them back.

Russia in turn has said, it is free to deploy its troops on its territory and issued a stern warning to the government in Kyiv against using force to reclaim control of the rebel-held territory where more than 14,000 people have died in seven years of fighting.

LNG’s role in the Crisis – Focus on Europe

Although the United States and its allies have tried to present a unified front to avert any potential Russian invasion of Ukraine, it faces headwinds given Russia’s possible retaliatory measure since Europe’s relies on Moscow for its energy requirements.

As much as 40% of Europe’s natural gas requirements are supplied by Russia, prompting concerns what could happen to Europe’s LNG requirements if Moscow were to cut off some or all of that supply.

Many countries in Europe are dependent on Russia for imports of liquid natural gas and, to a lesser extent, on crude oil. Foremost among them is Germany, Europe’s largest economy, which is a key ally of the United States. Germany is the biggest buyer of LNG from Russia which it needs to operate factories and help heat homes in winter.

Earlier this month, during a visit to the White House German Chancellor Olaf Scholz held talks with US President Joe Biden on the Nord Stream 2, a Russian pipeline which will channel gas from Russia to Germany, which is yet to be functional.

The Nord Stream 2 has been in the focus of some debates among the U.S and its allies, with Germany being in support of it while the concerned over it since it could increase Europe’s dependence on Russia for its energy needs.

The Biden Administration has made it clear that it will prevent the Nord Stream 2 pipeline from coming online if Russia invades Ukraine. On its part, Germany has said “all options are on the table” if Russia invades Ukraine. Despite the threat, Washington has not specified how it would block the pipeline from being operational.

“The fact that they are dependent on Russian gas has given Vladimir Putin tremendous coercive power over Europe’s economies,” opined retired General H.R. McMaster, a former U.S. national security adviser.

In the fall of 2021, during an energy crisis, Russia had dialed down exports to Europe, “helping exacerbate the low inventories and high demand that sent energy prices spiking.”

“In the typical Russian fashion, they did it in a way that they couldn’t be accused of breaching any of their commercial relations, but still managed to give a strong reminder to Germany, in particular, and the rest of Europe, just how dependent they were on Russian gas,” said David Goldwyn, president of the Goldwyn Global Strategies energy advisory firm. “They’re no fools.”

Denying accusations of using gas as a political tool, Putin said if German regulators approved the Nord Stream 2 pipeline, Russia would “begin pumping gas the next day.”

The possibility of Russia suddenly completely cutting off Europe from LNG supplies is very low, experts have warned that such a scenario would be very painful for Europe.

In another scenario, if Russia were to cut off gas exports via pipelines in Ukraine, the move would notably impact supplies to Germany given its reliance on Ukraine-based pipelines is part of the reason for its interest in Nord Stream 2. In both scenarios, any drastic cut off in LNG supplies to Europe would significantly impact Europe’s already-high energy prices which could skyrocket.

“If we will get additional volumes from Norway and from Azerbaijan and from Qatar and from the United States, then we can build up a scenario how to handle the situation that is theoretically possible if we have full disruption of gas flows from Russia,” said European Commissioner for Energy Kadri Simson.

One possible way to mitigate such an issue is to import LNG from countries including the US and Qatar. To this end, the U.S. has dramatically increased its exports of LNG to Europe although experts opine that such supplies are unlikely to cover all Europe’s needs in case of a complete cutoff by Russia.

Russia’s Gazprom PJSC “does not need to stop gas to wreak havoc in the European gas market as we’ve seen,” opined Anna Mikulska, a non-resident fellow in energy studies at Rice University’s Baker Institute for Public Policy.

In fact, even before Moscow stationed its troops near its border with Ukraine, it had limited spot deliveries and storage injections in Europe, where stocks were already dwindling and in a market where European buyers had compete fiercely with Asian buyers for LNG supplies given its tight supply in the global market.

Russia’s moves have “fuelled a lot of the growth in prices that we’ve seen in Europe and a lot of the panic,” said Mikulska.

Declines in LNG production in Europe has fueled its reliance on imports, which accounted for 85% of its natural gas supply between 2019 and 2021, according to researchers at the Oxford Institute for Energy Studies (OIES).

Russia was the largest source of LNG supplies in 2021, accounting for 31% of all imports, said OIES in its latest quarterly gas review. According to energy researchers, “that total expands if Turkey is included, which is a major export market for Russia and a pathway for Russian supplies to Southern Europe”.

According to OIES, gas moving through Ukraine accounted for 22% of the 168.7 billion cubic meters Russia sent to Europe in 2021.

Russia, the world’s largest pipeline gas exporter, has strategically moved to “diversify its routes to Europe: it can supply LNG through routing it through Belarus, the Baltic Sea, Poland and Turkey in the event a broader conflict were to arise in Ukraine,” said Andrei Belyi, an energy consultant at Estonia-based Balesene OÜ.

According to Belyi, the potential for a conflict between Russia and Ukraine existed in some form or other since 2014. However, he opined the likelihood of a full-scale military conflict is low given long-simmering tensions between the two nations. He went on to add, the intensity of the standoff can shift, “it has never led to full gas flow interruptions via Ukraine.”

In fact, a complete cut off of gas supplies to Europe is seen as being impractical, since Moscow has sufficient levers to pull when it comes to the geopolitics of energy; furthermore, there are also a wide variety of factors that would serve as strong deterrents.

“Russia receives billions of dollars in gas sales to Europe, which it will lose if it were to stop flows in any meaningful way,” said Mikulska.

“Furthermore, such a move also risks harming Russia’s reputation as a reliable supplier and could cut long-term demand in Europe if buyers were to replace supplies with other sources or alternative energies in a stronger push toward net-zero emissions,” added Mikulska.

So far, it is clear that any potential conflict in Ukraine is likely to have significant consequences in Europe. But what about the Middle?

LNG’s role in the Crisis – Focus on Middle East

While it is clear that Ukraine’s fate hangs in the balance, midst increased international diplomacy in the hopes of bringing about a negotiated settlement, the specter of an all-out war however still looms in the background. If Russia were to launch any offensive against Ukraine, its ripples will be felt not only in Europe but also as far away as in the Middle East and North Africa, where its effects are likely to be particularly profound.

Any conflict between Russia and Ukraine is likely to disrupt energy supplies in the Middle East, exacerbate food insecurity, and help states in the MENA region gain leverage over the US and Europe.

In the event of a conflict between the two, countries in the Middle East will find it challenging to single-handedly replace Russia as Europe’s main energy supplier, and will gain greater leverage over the West during negotiations of energy supplies.

While this is likely to be a setback for the Biden Administration’s efforts to shift its focus away from the Middle East and towards Asia, but it could create new opportunities for European diplomacy including efforts to mediate between Algeria and Morocco in efforts to open new energy supply routes.

Rise in tensions between the West and Russia is likely to add to de-stabilization efforts, especially in Syria and Libya. Furthermore, a full out war could trigger a sharp increase in global energy and wheat prices which will have a cascading impact on states whose economies have been battered by the Coronavirus-induced COVID-19 lockdowns which have brought many revenue streams to a stands still.

Fragile states in the Levant – such as Lebanon – and North Africa, could see governance problems worsen; regional states that are already struggling economically could find themselves more vulnerable to external pressure. A combination of these could be extremely dangerous for the region which is seeing a rise in the prices of bread, which has often been an indicator of political upheaval and of broader turmoil.


Efforts to find alternative suppliers of LNG have mainly focussed on Qatar – the world’s second largest producer of the fuel. In late January 2022, the United States has pushed Doha to reroute LNG exports to Europe, despite most of its supply being tied up in existing contracts with key customers in Asia.

Qatar’s LNG production is also close to its maximum capacity.

If the US fails to convince its Asian partners to release some of their contracted LNG purchases which could be diverted to Europe, new LNG supplies will be significantly limited with Europe forced to pay spot market prices, which are at an all-time high.

Qatar’s negotiating power is enhanced by a lack of alternatives, especially since neither Saudi Arabia nor the United Arab Emirates have comparable LNG production and export capabilities.

Saudi Arabia

Despite this somewhat limited role, Saudi Arabia has an important role to play in the energy mix: a conflict between Russia and Ukraine could reduce Russian oil supplies. prices of which have have skyrocketed.

Riyadh is under significant US pressure to increase oil production to drive down prices, which so far it has managed to block since higher oil prices boosts its revenues helping it to recover from the impact of the pandemic. Any conflict will increase Western demands to increase the Kingdom’s oil production.

On the other side of the coin, a conflict could also provide Saudi Arabia an opportunity to challenge Russia’s dominance over the eastern European oil market; it has already increased its global market share in its recent inroads into Poland.

North Africa

The region represents another potential solution to Europe’s energy worries given Algeria’s and Libya’s positions as possible alternative gas suppliers, albeit this would come with its own overheads, not the least of which is North Africa’s messy politics which could threaten the stability of supplies.

Tensions between Rabat and Algiers have already brought energy exports through the pipeline that connects Algeria and Spain to a halt. Given the long-standing animosity between the two, hope of a swift resolution are futile, although a crisis could trigger greater European efforts to mediate the dispute.

Algeria could however still provide LNG supplies to Europe or export more gas eastwards through a pipeline to Italy.


Political instability as well as ongoing threats of conflict in Libya makes the country a risky energy partner, especially given its limited production capacity.

Although Europeans countries may support whoever they see as being capable of delivering short term stability in western Libya, where a major gas pipeline is located, this would however be only a short term solution and not a sustainable one.

Furthermore, Moscow could complicate equations by leveraging its presence in eastern Libya and disrupt energy flows to Europe.

Already Egypt has increased its LNG supplies to Europe while Algeria could provide an additional 7 billion cubic meters annually to the EU.

Any conflict between Russia and Ukraine could see these MENA LNG producers be part of a solution which will see them increase their market share, increasing their goodwill and could bring them lucrative contracts in the future.

Impact on Food Security

Since the Black Sea basin is one of the world’s most important areas for agricultural exports with an estimated 12% of the world’s total global grain trade passing through the Bosphorus Strait every year, many of these shipments have destinations to nearby MENA countries.

In 2020, 95% of Ukraine’s exports of its grain went through the Black Sea with more than 50% of its wheat exports having destinations to the MENA region.

50% of Lebanon’s wheat came from Ukraine last year while Ukraine’s wheat exports to Libya stood at 43%. Egypt, the world’s largest importer of wheat, relies heavily on the Black Sea region for its import of wheat, and it also relies primarily relies on Ukraine for the supply of corn.

Any extensive conflict between Russia and Ukraine would limit the availability of export of agricultural products to MENA countries, thus triggering a potential food crisis.

Even if food supplies from Ukraine were to be replaced by other sources, there would inevitably be an escalation in prices, which would come at a time when agricultural prices are at their 10-year high, close to levels seen at the peak of the Arab Spring.

This by itself is a strong motivation for MENA countries to try and persuade Moscow to not escalate the ongoing conflict.

While Turkey has already showed its willingness to help defuse tensions, others who have good relations with Putin, including Egypt could be more involved.

Incidentally, after it annexed Crimea, Moscow went on to a diplomatic spree to try and improve its relations with countries in the Middle East and attract more foreign investment from the region to minimize the impact of Western sanctions.

MENA leaders are well positioned to persuade Putin to de-escalate by drawing attention to sanctions which could force them to limit the involvement of Russian companies on joint ventures.

A military conflict would force MENA countries to choose between doing business with Moscow or with the West, which in turn would make Moscow’s current balancing act of maintaining good relations with the Middle East, impossible to sustain. As a result, Russian presence in the MENA region would face more challenges and become more expensive, especially in countries with ongoing conflicts wherein Moscow is already involved.